Out with old before in with new

While the existing-home sales market in San Joaquin County appears to be on the rebound, new-home sales continue to stagnate.

Bruce Spence

While the existing-home sales market in San Joaquin County appears to be on the rebound, new-home sales continue to stagnate.

In the first quarter of this year, 364 new houses were sold, down 8.8 percent from 399 in the fourth quarter of 2007, according to the Gregory Group, a real estate information and consulting service in Folsom.

That total was down 56.6 percent from the first quarter of 2007, when 836 houses were sold countywide.

Prices have also continued to slide. An average sales price of $462,245 in the fourth quarter of last year fell to $428,005 in the first quarter, a 7.4 percent drop.

Greg Paquin, president of the Gregory Group, said that although sales and prices have basically bottomed out in the Sacramento metropolitan area, San Joaquin County might not be there quite yet.

Foreclosures need to be cleared out of the home sales market first, he said.

"The really good news is we're seeing this inventory starting to wash away," he said. "Resales are way up."

The housing resale market has seen an upswing starting late last year, with a record high number of pending sales in the county last month, including nearly 1,200 existing houses - mostly foreclosures - sold.

That's irrelevant to the new-homes market, though, because foreclosures will have to be sold before home builders can return to a normal market, said Alan Nevin, chief economist for the California Building Industry Association.

"Basically, they can't produce new homes to match the prices of foreclosures," he said. "It's really just that simple. The market is going to have to stabilize. It probably will take another six months to go through the inventory of foreclosed homes. Now it's just a matter of the pig going through the snake - and it's happening."

The number of permits issued for the construction of single-family homes in San Joaquin County hit a historic low of 46 in February, according to figures from the Construction Industry Research Board, which tracks the building sector in California. But the number of permits issued in March jumped to 83, an increase of more than 80 percent.